Work in Massachusetts, Live in Maine: Taxes, Credits and Filing

Reciprocity

Do Massachusetts and Maine have a tax reciprocity agreement?

No. Massachusetts and Maine do not have a reciprocity agreement. A Maine resident who earns wages in Massachusetts cannot ask the employer to skip Massachusetts withholding and withhold only Maine tax instead.

Both states claim the right to tax the same wages: Massachusetts as the state where the work is performed and Maine as the state of residence. Maine eliminates the overlap through a credit on the resident return, not through a withholding exemption. You still file two state returns every year.

Our state reciprocity agreements list shows which states do have these arrangements.

Returns

Which returns does a Maine resident with a Massachusetts job file?

Two. File a Massachusetts nonresident return (Form 1-NR/PY) and a Maine resident return (Form 1040ME). Complete the Massachusetts return first because the Maine credit calculation needs the final Massachusetts tax figure.

On Form 1-NR/PY, report your Massachusetts-source wages plus your total income from all sources. The regulation 830 CMR 62.5A.1 says a nonresident must file when Massachusetts-source income exceeds $8,000 or the prorated personal exemption, whichever is less. For a single filer whose income is entirely from Massachusetts, the personal exemption is $4,400 and the threshold is $4,400. Filing is also how you confirm your correct liability and recover any excess withholding.

On Form 1040ME, report all income from every source. Maine requires all residents to file if they are required to file a federal return, or if they have Maine income tax liability. Part-year residents, nonresidents, and safe harbor residents file Form 1040ME with Schedule NR or NRH. If you are not sure whether you must file, see the 2025 Form 1040ME General Instructions at maine.gov/revenue. Both 2025 returns are due April 15, 2026.

MA tax

How does Massachusetts tax a Maine resident's wages?

Massachusetts taxes wages at 5%; on the nonresident return they are Part B income. For income above $1,083,150 in 2025 ($1,107,750 in 2026), an additional 4% surtax applies. Most commuters from Maine will not reach the surtax threshold.

Nonresidents owe Massachusetts tax only on income earned while physically working in the state. The regulation 830 CMR 62.5A.1 allocates a nonresident employee's wages by the share of total working days spent in Massachusetts. Total working days do not include days in which the employee was not required to work, such as holidays, sick days, vacations, and paid or unpaid leave. A day spent working partly in Massachusetts counts as a Massachusetts day, unless you can show you worked outside Massachusetts for more than half of it.

The personal exemption ($4,400 for a single filer in 2025) is prorated by the ratio of Massachusetts income to total income. If all of your wages come from Massachusetts work, you receive the full exemption. Massachusetts has no standard deduction, but nonresidents can deduct the Social Security and Medicare (FICA) tax paid on their Massachusetts wages, up to $2,000 per person, and certain commuter costs on Schedule Y. The rent deduction (50% of rent, up to $4,000) is only for a principal residence in Massachusetts, so rent on a Maine home never qualifies.

The credit

How does Maine credit the Massachusetts tax?

Maine gives full-year residents a credit for income taxes paid to another jurisdiction under 36 M.R.S. section 5217-A. To claim it, complete Form 1040ME, Schedule A (line 14) and the Credit for Income Tax Paid to Other Jurisdiction Worksheet.

The credit has two steps. First, divide the income sourced to and taxed by Massachusetts by your Maine adjusted gross income. Multiply that fraction by your Maine tax liability before credits. This gives the portion of your Maine tax attributable to the Massachusetts wages. Second, compare that amount to the actual Massachusetts tax assessed on the same income. The credit equals the smaller of the two.

An important distinction: use the actual Massachusetts tax liability, not the amount withheld from your paychecks. If Massachusetts withheld $3,500 but your final MA tax liability was $3,200, the credit is based on $3,200.

If Massachusetts tax on your wages exceeds the Maine tax on the same income, the credit covers all of Maine's share and you owe Maine nothing on those wages. If Maine's tax is higher, you owe Maine the difference. Maine's rates (5.8%, 6.75% and 7.15% for 2025) are all above 5%, but Maine also subtracts a larger standard deduction and exemption, so the comparison is between the two tax bills on the same wages. By our calculation with the official 2025 figures, for a single filer whose wages all come from Massachusetts, the Maine tax passes the Massachusetts tax from about $74,000 of wages, so above that level you pay Maine a small difference.

Nonresidents and safe harbor residents of Maine may not claim this credit. They receive a nonresident credit on Schedule NR instead.

For 2026, Maine's single brackets are 5.8% up to $27,400, 6.75% up to $64,850 and 7.15% above, with a $15,700 standard deduction and a $5,300 personal exemption; a new 2% surcharge applies to Maine taxable income above $1,000,000 for a single filer. Line 14 of Schedule A is the line on the 2025 form; Maine's credit guide, written for the 2024 forms, still refers to line 13.

Withholding

How should payroll handle Massachusetts and Maine withholding?

A Massachusetts employer must withhold Massachusetts income tax from your wages. You file Form M-4 to set your Massachusetts withholding allowances. The withholding covers your Massachusetts liability, and any difference is settled when you file Form 1-NR/PY.

If your employer has no operations in Maine, it has no obligation to withhold Maine tax. In that case, you may need to make estimated payments to Maine. The 2025 Form 1040ME instructions note that if your tax due after subtracting withholding, credits, and other payments is $1,000 or more, you may owe an underpayment penalty. Maine requires estimated payments when your Maine tax for the year, beyond withholding and credits, is $1,000 or more and your prior-year Maine tax was also $1,000 or more. For 2026 the Form 1040ES-ME installments are due April 15, June 15 and September 15, 2026 and January 15, 2027.

If your employer operates in both states and withholds for both, your returns will sort out the credits and any overpayment. Excess withholding in either state comes back as a refund when you file. The Maine withholding amount goes on Form 1040ME, line 25a; the Massachusetts withholding amount goes on Form 1-NR/PY.

On the Massachusetts side, estimated payments are needed only if you expect more than $400 of Massachusetts tax on income not covered by Massachusetts withholding, which is rare when payroll withholds on your Massachusetts days. A Maine employer that has no office or business in Maine is not required to withhold Maine tax, but Maine lets employers withhold as a courtesy.

Worked example: Maine resident earning $80,000 in Massachusetts

Single filer, $80,000 salary entirely from Massachusetts work, 2025 tax year, standard deduction. Massachusetts: $2,000 FICA deduction and $4,400 exemption. Maine: $15,000 standard deduction and $5,150 exemption. With 2026 Maine figures ($15,700 and $5,300), Maine tax is about $3,722 and net Maine tax $42. Approximate; the Maine tax table may differ by a few dollars.

Remote work

What if you work from home in Maine for a Massachusetts employer?

Days you work from home in Maine are not Massachusetts-source income. Massachusetts allocates a nonresident's wages based on days physically present in the state. It does not have a permanent convenience-of-the-employer rule. The pandemic-era regulation 830 CMR 62.5A.3 treated remote workdays as Massachusetts days from March 10, 2020 through 90 days after the COVID state of emergency ended, but that rule is no longer in effect.

On the Maine side, the credit guide says that salaries and wages earned while working in Maine, whether for the convenience of the employee or at the request of the employer, cannot be sourced to another jurisdiction for purposes of the credit. In practice, home days in Maine are Maine-source income. Massachusetts does not tax them and Maine offers no credit for them because no other-state tax was paid.

If you split your week between a Massachusetts office and your Maine home, keep a daily log of your work location. The ratio of Massachusetts days to total working days determines the share of pay that Massachusetts taxes and that Maine can credit.

Moving

What changes if you move between Maine and Massachusetts mid-year?

If you move during the year, file as a part-year resident in each state. In Massachusetts, Form 1-NR/PY covers both part-year and nonresident situations. In Maine, part-year residents file Form 1040ME with Schedule NR.

During the months you lived in Maine, Maine taxes all your income as a resident, and Massachusetts taxes only MA-source wages. During the months you lived in Massachusetts, the roles reverse. The Maine credit guide notes that a part-year Maine resident may claim a credit for income tax paid to another jurisdiction on income earned during the Maine residency period only. Income earned before you became a Maine resident does not qualify for the credit, but it may qualify for the nonresident credit on Schedule NR.

Payroll errors

What if the wrong state's tax was withheld?

• Only Massachusetts tax withheld: This is normal for a Maine resident working in Massachusetts for a Massachusetts-only employer. Make quarterly estimated payments to Maine if you expect to owe $1,000 or more after credits and withholding and your prior-year Maine tax was also $1,000 or more.
• Only Maine tax withheld, but you worked in Massachusetts: Ask your employer to begin withholding Massachusetts tax on wages for days worked in Massachusetts. File Form M-4 with the employer. You still owe Massachusetts tax on those wages.
• Both states withheld on all pay: File both returns. The Maine credit and any excess withholding will produce refunds where appropriate. Excess Massachusetts withholding is refunded on Form 1-NR/PY; excess Maine withholding is refunded on Form 1040ME.

This is general information, not tax advice.